The first Bain Capital fund paid out 173 percent in average annual returns over a decade, but in 1984 when Mitt Romney and the other co-founders of Bain Capital were raising their first fund in Boston, no one had ever heard of a "leveraged buyout."

A Los Angeles Times report, published Thursday, is spreading Friday, after the newspaper unearthed details of how Bain Capital raised its first fund from some characters who later made headlines in the worst way possible.

Spurned by traditional investors – family offices, for example – Mitt Romney and the other Bain Capital co-founders turned to some unorthodox sources for their $37 million Fund I, mostly through foreign investors, the Times reports.

The Times provided a rogue's gallery of early Bain Capital investors, including three parties who later were convicted in or connected to major fraud cases:

Sir Jack Lyons, British financier and philanthropist, and a former Bain & Company associate of Romney's, later convicted for his role inflating shares of Guinness: $2.5 million invested in Bain Capital I.

Robert Maxwell, British publishing baron who died in 1991 after raiding his own company's pension fund for hundreds of millions: $2 million invested.

Francisco R.R. de Sola and Herbert Arturo de Sola, of a Salvadoran coffee exporting family that included Orlando de Sola, Herbert's brother, who was later convicted of fraud and also was suspected by the CIA of supporting death squads in El Salvador. They were part of a group of Central American investors that committed 20 percent of the fund's money.

Industries:

Comments

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.